Which of the following statements is(are) correct concerning hedge funds?
I. They are highly regulated.
II. They hedge all positions to limit risks.
III. Management and other fees are extremely low compared to other types of funds.
IV. Access is limited to institutions and high net worth or high income individuals.

Question

Quizplus · Accepted Answer

IV only. Hedge funds are known for being less regulated compared to mutual funds, not hedging all positions necessarily (as their strategies can vary widely), and typically charging higher fees (including performance fees on top of management fees). Access to hedge funds is indeed limited to accredited investors, which includes institutions and individuals with high net worth or income.

Which of the Following Statements Is(are) Correct Concerning Hedge Funds